Inflation and Income Distribution: Further Evidenceon Empirical Links

August 1, 1995

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Format: Chicago

Ales Bulir, and Anne Marie Gulde. Inflation and Income Distribution: Further Evidenceon Empirical Links, (USA: International Monetary Fund, 1995) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the effects of inflation and associated financial instability on income distribution. Using both pooled cross country and single country time series models, the level of inflation, inflation variability, and the variability of the nominal exchange rate are shown to impact negatively on overall income equality. Looking at disaggregate measures of income distribution, the issue as to whether inflation is a progressive or regressive tax is found to be negatively correlated with the level of development and the sophistication of the financial structure. The paper argues that these results point towards financial variables as a partial way of rectifying the generally poor explanatory power of both cross-country and time series models of income distribution.

Subject: Consumer price indexes, Foreign exchange, Income distribution, Inflation, National accounts, Personal income, Prices, Purchasing power parity

Keywords: Consumer price indexes, Distribution-inflation link, Equivalized income, Family income, Gini coefficient, Income, Income change, Income distribution, Income distribution-inflation link, Income quintile, Income share, Inflation, Inflation data, Inflation uncertainty, Inflation variability, Personal income, Purchasing power parity, Quintiles in the United States, Sectoral income, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1995/086
Stock No:

WPIEA0861995
ISBN:

9781451850826
ISSN:

1018-5941

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